Asda and Tesco have joined Iceland in reducing the cost of Aptamil baby formula after manufacturer Danone agreed to a 7% price cut to retailers.

Asda also said it will let customers pay for baby formula using their rewards scheme vouchers for the first time.

Last week Iceland said it would be cutting the cost of Aptamil from January 16 after Danone agreed to reduce the price at which it offers its Aptamil powdered formula to retailers by up to 7%.

Retailers, not Danone, set the shelf price of the products, but it is expected that more supermarkets will follow Iceland and Asda.

For many of Asda’s customers, and families nationwide, we understand that buying baby formula is a vital necessity in their weekly shop

Asda said it would cut the price of six Aptamil lines “the majority by an average of 7%”.

Five Aptamil core products will drop from either £14.50 or £14 to £13.50, while Aptamil Advanced 1 First Formula Baby Milk Powder from Birth will fall from £19 to £18.

Tesco is to cut the price of five Aptamil products by between 80p and £1 from Tuesday.

Asda’s chief commercial officer, Kris Comerford, said: “For many of Asda’s customers, and families nationwide, we understand that buying baby formula is a vital necessity in their weekly shop, which is why we’re taking swift action to pass on falling manufacturing costs to customers before any other retailer.

“At the same time, we’ve decided to remove exclusions on using Asda rewards vouchers to pay for baby formula as we want to do everything we can to help families manage their budget and keep their family fed.”

Last month, the Competition and Markets Authority (CMA) said formula prices had risen by a quarter over the past two years.

The CMA is investigating the baby formula market after finding it was vulnerable to higher-than-inflation price rises. Only one UK retailer, Aldi, sells its own brand.

The regulator found competition was hampered because shoppers were reluctant to switch brands, either because they were recommended by friends and family or because their baby would drink only one.

New parents could make significant savings of £500 in the first year of a baby’s life on formula milk products by shopping around, the CMA added.

Last year Iceland’s own research suggested 86% of new parents were concerned about how to afford to feed their non-breastfed babies.

Iceland has also called on the Government to review Healthy Start vouchers, which are currently worth £8.50 per week for babies up to age one.

The vouchers have not increased in value since April 2021, and they now do not cover the cost of even the cheapest formula after recent price increases.